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Working through maze of mineral-leasing rules

Mesa County Commissioner Steve Acquafresca has an idea for salvaging this county’s share of federal mineral leasing funds: Send it back to the state, which already sent the money to this region, so the Colorado Department of Local Affairs can hand it out to entities deemed appropriate by a local board.

If that seems a convoluted way to handle $1.6 million designed to help this community alleviate the impacts of energy development, it is. But Acquafresca isn’t trying to complicate things.

He is looking for the most effective means to ensure Mesa County receives its full allocation of funds due from mineral leasing on federal lands, and from money designed to make up for property taxes that can’t be collected on federal lands. His idea deserves further exploration to determine if it can resolve the funding dispute this year. But long term, it’s clear the state Legislature must change the law it passed this year regarding mineral lease funds to make it comply with the latest interpretation from the Department of the Interior.

Briefly, here’s how this dispute transpired.

Many Colorado counties receive both federal mineral lease funds — that come from energy companies extracting minerals such as coal, oil and gas from nearby federal lands — and Payment in Lieu of Taxes, or PILT money — to offset the fact the counties cannot collect property taxes on federal lands. Although the payments vary from year to year, Mesa County usually receives several million dollars from the two programs.

✔ In 2010, the Interior Department decided it would deduct the mineral lease funds Colorado counties receive from the PILT money they get. That meant a reduction of $1.4 million for Mesa County last year.

✔ To avoid future deductions, the Colorado Legislature this year passed a bill authorizing counties to create separate federal mineral leasing districts to accept the leasing money and give it to qualified applicants. Because the districts would be separate from the counties, the thinking went, counties would be able to receive their PILT funds with no deduction of the mineral leasing money.

✔ Several counties, Mesa among them, created mineral leasing districts this summer. In September, the Mesa County Federal Mineral Leasing District board began accepting applications for the $1.6 million in mineral leasing funds it received this year. It was scheduled to award the money early next month.

✔ Recently, the Interior Department said the arrangement won’t work because the mineral leasing districts aren’t really distinct entities from the counties. The districts are created by the counties, with board members appointed by the county commissioners and in some cases, such as Mesa County, with a county commissioner serving on the district board. Because of that, Interior said, the leasing funds would still be deducted from counties’ PILT money.

Hence Acquafresca’s suggestion to have the county mineral leasing district board send its $1.6 million to the Department of Local Affairs and let it allocate the funds, with the hope it will do so the same way the local board suggests.

There’s no guarantee this idea will work, either. But it’s worth exploring as a means of trying to make sure this community receives the full amount of money it is due for the activities occurring on federal lands.